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The illicit market is eating the legal marijuana industry’s lunch. One proposed solution is to cut taxes

SAN FRANCISCO - JULY 25:  Staarla Heaney hand rolls marijuana cigarettes at the San Francisco Patients Cooperative, a medical cannabis cooperative, July 25, 2002 in San Francisco, California. A San Francisco city supervisor has drafted a proposal allowing voters in San Francisco to decide whether the city should consider getting into the marijuana growing business. Supervisor Mark Leno said he drafted the proposal because the Drug Enforcement Administration remains determined to close down clubs that distribute medical marijuana in San Francisco and other parts of California.  (Photo by Justin Sullivan/Getty Images)
Justin Sullivan/Getty Images
Staarla Heaney hand rolls marijuana cigarettes at the San Francisco Patients Cooperative, a medical cannabis cooperative, July 25, 2002 in San Francisco, California.

On Monday, several cannabis-industry supporting state lawmakers proposed to slash taxes as a way to jump start California’s legal marijuana marketplace.

California’s much-hyped, year-old marijuana industry fell woefully short of expectations in 2018 and industry leaders blame their inability to compete with the state’s robust black market, which doesn’t pay the taxes and navigate the red tape they do.

So on Monday, several cannabis-industry supporting state lawmakers proposedto slash taxes as a way to jump start California’s legal marijuana marketplace.

Democrat Assemblyman Rob Bonta proposed to temporarily reduce the 15% tax consumers pay at the retail counter to 11% and eliminate the $148 per pound of pot farmers pay for three years.

Boosters of the legal pot industry said the tax proposal was a good start, but that onerous and costly regulations are also enticing growers and sellers to skip licensing and remain selling marijuana illegally. The proposal, if passed, would not lower county and city taxes.

We debate the proposal.

With files from the Associated Press

Guests:

Jerred Kiloh, president of United Cannabis Business Association, a Los Angeles-based cannabis industry group representing regulated cannabis retailers in California, and owner of The Higher Path Collective, a medical and recreational cannabis dispensary in Sherman Oaks

Rosalie Liccardo Pacula, co-director of  Drug Policy Research Center at Rand Corporation; expert in health economics

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